PDSi Reports First Quarter 2011 Results

John D. Bair, Chairman of the Board, President and Chief Executive Officer,
stated, "Our first quarter results show a solid start for 2011. We are
actively working growth opportunities in all three of our targeted markets
and, coming out of our record-profit turnaround year in 2010, continue to
build the financial resources necessary to capitalize on them. We continue
to generate cash and have completely paid down our working capital line,
freeing up capacity to fund future growth."

Total sales were $6.4 million for the 2011 first quarter, up slightly
versus the fourth quarter of 2010. Timothy J. Harper, Chief Operating
Officer, added, "Historically, PDSi has seen a drop in revenue between the
fourth and first quarter, with Q1 revenue declines averaging 18% in four of
the previous five years. We have broken out of this seasonal pattern the
last two years, demonstrating our more diversified and stable revenue base.
We also continue to see the improved margin levels that were key to our
return to profitability, showing an improvement in gross profit as a
percentage of revenue from 24% in the 2010 first quarter to 33% in 2011.
In fact, we managed to maintain gross profit on a dollar basis at $2.1
million, despite a year-on-year decline in overall revenue."

The $0.6 million profit, or $0.07 per diluted share, for the first quarter
included a $0.3 million net tax benefit for research and development
("R&D") tax credits for tax years 2001 through 2010 based on completion of
a study initiated in late 2010 of the Company's qualifying R&D activities.
The Company's fourth quarter 2010 results included a $0.5 million net tax
benefit associated with R&D credits based on estimates developed at that
time. The $0.8 million cumulative benefit impacting these last two
quarters reflects the full credit, net of a reserve for uncertain tax
positions.

Cash generated from operations was $0.3 million, the ninth sequential
quarter with positive operating cash flow. Borrowings on the Company's
line of credit were reduced to zero from $0.3 million at the end of 2010,
and cash on hand at the end of Q1 was $0.5 million.

Financial Results

Net Income

Net income for the first quarter of 2011 was $0.6 million, or $0.07 per
diluted share. This compares to $0.3 million, or $0.04 per diluted share,
for the same quarter last year. The first quarter of 2011 was impacted by
a nonrecurring $0.3 million R&D tax credit net benefit as previously
mentioned.

Sales

Total sales declined 27% to $6.4 million for the 2011 first quarter from
$8.8 million for the same quarter a year ago. First quarter Product sales
declined 54% to $2.7 million in 2011 from $5.9 million in 2010. This
decline primarily was attributable to significantly lower sales to telecom
OEMs that had very strong activity in the first half of 2010, along with
declines at larger imaging and diversified computing OEM customers that had
occurred over the course of 2010. Service sales increased $0.8 million, or
28%, to $3.7 million for the 2011 first quarter, with the growth
attributable to the ramp of business in the U.S. and EMEA for both new
customers and new programs within existing customers.

Gross Profit

Gross profit was flat at $2.1 million for the 2011 first quarter compared
to same quarter last year. Gross margin as a percentage of revenue
improved compared to last year from 24% to 33%. The gross margin
improvement on lower year-on-year total sales largely was attributable to
the change in mix driven by the growth of higher margin Service segment
revenue. Within the Service segment, margins as a percentage of revenue
improved from 37% to 41%, driven by a shift toward higher margin programs
and improved operating leverage on increased sales. Product gross margin
improved compared to the prior year quarter from 18% to 21%, driven by a
shift in mix toward higher margin Product business.

Operating Expenses

Operating expenses were up slightly to $1.8 million for the 2011 first
quarter from $1.7 million a year ago; reflecting investments in personnel
necessary to support and grow the business.

Interest Expense

Interest expense for the 2011 first quarter was reduced to $1,000 from
$23,000 for the same quarter last year due to much lower average debt
outstanding. Debt outstanding was reduced to zero at the end of the first
quarter compared to $1.2 million at the end of the prior year first
quarter.

Recent PDSi Highlights
-- On March 24, 2011, PDSi's line of credit with Wells Fargo Bank moved
from an asset based line of credit to a revolving credit facility with
more favorable costs and terms, reflecting improvements in the Company's
financial position realized over 2010.
-- On April 13, 2011, PDSi was honored from a group of medium-sized
finalists at the 2011 Columbus Business First Corporate Caring Awards.
This award was in recognition of the positive impact PDSi and its
employees have had on the community, in particular the Company's
emphasis on the area of education.
-- PDSi's Annual Meeting of Shareholders will be held on Monday,
May 9, 2011, at 9:00 a.m. EDT at the Company's headquarters at 6600
Port Road, Groveport, Ohio 43125.

The telephone number to participate in the conference call is (877)
485-3107. A slide presentation will be referenced during the call, which
may be accessed at the PDSi website (www.pinnacle.com) by clicking on
"Investor Relations" and then "Conference Calls." An audio replay of the
call will be available through the Investor Relations section of the
Company's website approximately one hour following the conference call.

About PDSi

PDSi is a global provider of Electronics Repair and Reverse Logistics
Services, ODM/OEM Integrated Computing Services, and Embedded Computing
Products and Design Services for the Diversified Computing, Telecom,
Imaging, Defense/Aerospace, Medical, Semiconductor and Industrial
Automation markets. PDSi provides a variety of engineering and
manufacturing services for global OEMs requiring custom product design,
system integration, repair programs, warranty management, and/or
specialized production capabilities. With facilities in the U.S., Europe
and Asia, we ensure seamless support for solutions all around the world.

More than just an ODM, integrator or reverse logistics provider, PDSi's
engineering, technical and operational capabilities span the entire product
lifecycle allowing us to better understand and develop custom solutions for
each of our customer's unique requirements. Our product capabilities range
from board-level designs to globally certified, fully integrated systems,
specializing in long-life computer products and unique, customer-centric
solutions. Our capability to perform higher-level repair services
in-region allows us to customize solutions for our customers so that they
can deliver world-class service levels to their customers with reduced
logistics, component replacement and inventory costs.

Portions of this release include forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including, but not limited to, statements
regarding the Company achieving its financial growth and profitability
goals, or its sales, earnings and profitability expectations for the year
ending December 31, 2011. The words "believe," "expect," "anticipate,"
"estimate," "intend," "seek," "may" and similar expressions identify
forward-looking statements that speak only as of the date of this release.
Investors are cautioned that such statements involve risks and
uncertainties that could cause actual results to differ materially from
historical or anticipated results due to many factors. These factors
include, but are not limited to, the following:

-- changes in general economic conditions, including prolonged or
substantial economic downturn, and any related financial difficulties
experienced by original equipment manufacturers, end users, customers,
suppliers or others with whom the Company does business;
-- changes in customer order patterns;
-- changes in our business or our relationship with major technology
partners or significant customers;
-- failure to maintain adequate levels of inventory;
-- production components and service parts cease to be readily available
in the marketplace;
-- lack of adequate financing to meet working capital needs or to take
advantage of business and future growth opportunities that may arise;
-- inability of cost reduction initiatives to lead to a realization of
savings in labor, facilities or other operational costs;
-- deviation of actual results from estimates and/or assumptions used by
the Company in the application of its significant accounting policies;
-- lack of success in technological advancements;
-- inability to retain certifications, authorizations or licenses to
provide certain products and/or services;
-- risks associated with new business practices, processes and information
systems;
-- impact of judicial rulings or government regulations, including related
compliance costs;
-- disruption in the business of suppliers, customers or service providers
due to adverse weather, casualty events, technological difficulty, acts
of war or terror, or other causes;
-- risks associated with doing business internationally, including
economic, political and social instability and foreign currency
exposure; and
-- other factors from time to time described in the Company's filings with
the United States Securities and Exchange Commission ("SEC").

The Company undertakes no obligation to publicly update or revise any such
statements, except as required by applicable law. For more details, please
refer to the Company's SEC filings, including its most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q.